courtesy of the National Association of Realtors, here is a good video explanation of the difference between the Mean Average and the Median Average.
Dead link apologies, some text from NAR while we work on finding an updated video:
Median: What Does it Mean?
In a world of statistical averages, many have asked why the Economic Research Group of the NATIONAL ASSOCIATION OF REALTORS® reports a median home sale value instead of a mean in its monthly Existing-Home Sales reports (as well as most of its other industry statistics). There are many people who believe the mean is easier to understand than the median. But the median measure is not difficult to appreciate. Let’s start with defining and differentiating between the two measures.
A mean is calculated by adding up all the values in a distribution and then dividing the sum by the total number of values contained in that distribution. To find a median value, one takes all of the values in the distribution, sorts in ascending order, lines them up and finds the middle value.
They sound similar, and in may instances, there is not much difference between the two values. But the reason NAR concentrates on the median instead of the mean is because the mean value calculation has a limitation that can prevent it from reflecting an “average.” In calculating home sales price statistics this limitation occurs when the sale price of one home varies greatly from the remainder of the homes. This can skew the average.